Former UK Prime Minister Boris Johnson has criticized the current electricity pricing system in the United Kingdom, arguing that it is out of control and damaging to consumers and industry. He points to Texas as a model for how renewable energy, specifically solar and wind power, can lead to lower electricity bills when integrated with a market-driven pricing structure.
Johnson contends that the UK is producing an "abundance" of clean electricity but consumers are still facing rising prices. He attributes this partly to the costs associated with integrating new renewable sources with an "inadequate infrastructure." Furthermore, he criticizes the practice of paying wind farms to shut down on windy days because the grid cannot handle the excess power, calling it an "eco-lunacy."
"We are walloping consumers, we are crippling our industry and we are deterring anyone who wants to invest in the UK," Johnson stated. He also highlighted that electricity prices are sensitive to the price of gas, which sets the national price when demand is high, a situation exacerbated by global events such as the war in Ukraine.
Johnson dismisses the idea of abandoning renewables altogether or solely relying on nuclear power, though he supports expanding nuclear capacity. Instead, he advocates for adopting "proper Conservative principles" and allowing the market to determine the price of renewable energy. He suggests that this approach could mirror the success seen in Texas, a state known for its oil industry but which has also seen a significant increase in wind and solar power over the past 15 years.
"In the past 15 years there has been a massive increase in Texan wind and solar power, so that together they comprise about 37 percent of the electricity market," Johnson observed. He noted that Texas has achieved this without the price spikes seen in Britain and with consumer electricity prices approximately half those in the UK.
The key difference, according to Johnson, is that Texas does not operate under a "demented Soviet-style Gosplan national price." Instead, it employs local pricing. This means areas with abundant wind farms, such as West Texas, benefit from very cheap electricity, attracting significant business investment in energy-intensive industries like data centers.
Johnson proposes that the UK adopt a similar model, allowing local areas with high renewable energy capacity, such as Scotland or the North East, to benefit from lower electricity bills. He argues this would serve as a "massive natural force for levelling up" by attracting new industries and creating 21st-century jobs. He believes that eliminating costly practices, such as curtailment payments for wind farms, would lead to falling electricity prices across the country, rather than a zero-sum increase elsewhere.
"Get rid of socialist equality of misery and let the market work," Johnson urged, calling for a shift away from the current one-size-fits-all pricing system in the UK.